Many believe that trading in stock market is matter of experience and knowledge but as per my opinion it is an art. An art that you will have to master before you put your money to trade, there are things you have to keep into mind. The following are the points that you should remember.

  1. Decide how you want to invest in the stock market

There are several ways to invest in the share market. There are strategies, there are options and there are the trading techniques that you could implement. So you should decide first that how you want to invest in the share market. You are going to start as an intraday trader or the delivery trader. You want speculative trade or you want the trade based on fundamentals and technical. Many aspects are there which you need to take care.

  1. Open an investing account

This is very basic thing you should remember. You must open an investing account to invest. Like if you want to start saving your money in the bank you need to open an Savings account with that particular bank. In the similar way you need to have trading account or investing account with your broker to start trade.        

  1. Know the security in which you are investing

You must be clear with the securities in which you are investing. You should know in which segment you want to invest. Either in equity, derivatives or the trading style what you wish to follow.

  1. Set a budget for your stock investment

You have to decide in advance that how much money you want to invest in the share market. You should be clear that how much investment you can take risk of and also the return and the time for which you wish to invest in the share market.

  1. Start investing

Now you should start to invest.

Today the US Markets, European Market, and Most of the Asian Indices are trading in red. There is nothing strange about it. Wall Street closed sharply in the red Monday as virus fears gripped investors amid worries that an accelerated outbreak will hit China’s economy and slow global growth.

Why there is fear around the world market?

A new coronavirus, designated 2019-nCoV, was identified in Wuhan, Hubei province, China, after people developed pneumonia without a clear cause and for which existing vaccines or treatments were not effective. The virus has shown evidence of human-to-human transmission and its transmission rate (rate of infection)  appeared to escalate in mid-January 2020, with several countries other than China reporting cases. The incubation period (time from exposure to developing symptoms) of the virus is between 2 and 14 days and it remains contagious during this time. Symptoms include fever, coughing and breathing difficulties and it can be fatal. Confirmed cases have been reported by several countries across Asia, Oceania, Europe, and North America. The first confirmed death from the coronavirus infection occurred on 9 January. As of Jan. 27, 2020, approximately 4,600 cases have been confirmed and about 106 deaths, all in China.

What is the concern?

Health authorities in the U.S., however, have downplayed the risk of contagion, with the Centers for Disease Control & Prevention on Monday claiming that “the immediate health risk from (the coronavirus) in the U.S. is currently considered low.” With as many as 48 cities in China reported to be in lockdown, concerns over lower jet fuel demand continued to drive oil prices lower, keeping energy stocks in the red.

Which Shares are affected the most?

Shares of airlines and travel agents were sharply lower amid freezes on travel into and out of the world’s second largest economy, while companies with an indirect exposure to Chinese consumer spending abroad, such as casinos and luxury retailers, also tumbled.

The china market will be closed till 3rd of February. While, the Indian market are uncertain because of the the budget which is to be announced on the beginning of the February month.

 

This write up is for the novice traders. Those traders who have entered to the market recently or those who want to enter in the stock market. Here, we are telling you the most common mistakes which the beginners do in the stock market. Many are attracted into this market by seeing the lucrative returns of the market. But it is the fact that more than 95% investors fails in the market. Here we will be telling you about the major reasons behind the failure in the stock market.

  1. Entering the market without training
  2. Being too emotional about money
  3. Lack of record keeping
  4. Anticipating profits
  5. Blindly following the mechanical systems

Entering the market without training

Most of the people who enter to the stock market are entered in the market by hearing the profits only. They check their luck in the market assuming the trading to be similar as gambling. Share market trading requires training and guidance before entering to the stock market.

Being too emotional about money

Many traders become too much emotional about the money they gain or lose. They should be careful about their own emotions. They should not overreact. They should understand that profit and loss in the market are two sides of the same coin ie trading. They should accept it deligently and should not allow their mind to affect the trading.

Lack of record keeping

“When you make a trade, everything is going up or down. It can feel like you have no control over what is happening. By the very nature of buying and selling, total strangers are giving you money or taking away money, and that can be very stressful.” So you need to make records when you are trading with the stocks. You should not allow your emotions to trade in the stock market.

Anticipating profits

Most traders don’t want to acknowledge that a trade could turn against them. They enter the market assuming they’ll be successful, refusing to look in the rearview mirror. It’s also common for emerging traders to use a calculator to predict how much they’ll make and how they’ll spend the unrealized profits!

It’s dangerous to anticipate how much you’ll make in advance. “Let the market tell you what you are going to make. Anytime you say ‘I have to…’ you’re in for potential trouble. Remember: The market doesn’t care about you.”

Blindly following the mechanical systems

Don’t follow the mechanical systems blindly. Don’t rely too much on technology.

Simple mathematics can speak volumes about your stock. Through this write up we are making you aware of the stocks market ratios which you should know. Every ratio has its own significance and importance.

  1. Return on Equity
  2. Debt Equity Ratio
  3. Current Ratio
  4. Asset Turnover Ratio
  5. Operating Profit Margin

Return on Equity

The objective of any investment is the return it will generate.

“ROE measures the percentage return on the shareholders fund from the business undertaking and also the overall earnings performance of the company.”

  • The ratio helps in comparing the profitability of the companies in the same industry.
  • The ratio also highlights that capability of the management of the company.

“Higher ROE better indicates the management is doing well in growing the business of the company and at the same time adding value to the shareholders wealth.”

RoE = Net income / shareholder equity

Debt Equity Ratio

The financial ratio helps to know how much the company is leveraged, which means it tell that how much outside funding is involved in running the business of the company in proportion to own capital (Equity capital).

“Generally it is considered that lower the debt to equity ratio better it is and higher the ratio riskier it is.”

But one should not see this in isolation it may mislead. As long as the company with high debt is contributing return higher than the interest charges on the external loan it will contribute in enhancing the shareholders value. However, if the interest cost is more than the return generated from the leveraged amount it may eventually lead to bankruptcy and adversely affect the shareholders value.

Debt-to-equity ratio: Total liabilities/ Total shareholder’s equity

Current Ratio

The ratio measures liquidity position of a firm.

“In general, higher the ratio means that the company is more capable of meeting its short term liabilities. Investors can thus assume that the day to day activities of the company will not get affected due to working capital pressure.”

Current ratio= Current assets/ current liabilities

Asset Turnover Ratio

This ratio shows how efficiently the management of the company is using the available assets in generating revenue for the company.

“Higher the asset turnover ratio better it is, as it indicates that company generating more revenue on per amount spent on the asset.”

This also reflects the efficiency of the management in using the available resources most optimally. Here the comparison should be made between the companies of the same industry.

Asset Turnover = Sales/Average Total Assets

Operating Profit Margin

The ratio measures operational efficiency of a company and its pricing strategy.

“A higher ratio reflects efficiency of the business in procuring raw materials and converting them into finished products.”

It measures the proportion of the total revenue left over after meeting variable costs on raw materials and wages. The higher the margin, the better it is. While analysing a company, one should see whether it has improved OPM over time or not. Investors should also compare OPMs of other companies in the same industry during the same period.

Asian markets declined on account of the china death poll. Mainland Chinese stocks fell in early trade, with the Shanghai composite down about 0.8% while the Shenzhen component dropped 1.19%. Hang Seng index also fell 1.17%. Nikkei slipped 0.65% in morning trade while the Topix index also shed 0.5%. Technology shares led the S&P 500 marginally higher on Wednesday, as a healthy forecast from IBM helped mitigate worries over the developing coronavirus outbreak. The Dow Jones Industrial Average fell 9.63 points, the S&P 500 gained 0.98 points, and the Nasdaq Composite added 12.96 points.

It was a flat start for the Indian indices on January 23 with Nifty around 12,100. The Sensex opened down 4.15 points 41111.23, and the Nifty down 9.10 points at 12097.80. Axis Bank, L&T, IOC are among major gainers on the Indices, while losers are ICICI Bank, Cipla, Zee Ent.

Stir in the market:

  • Share price of Larsen & Toubro (L&T) gained over 3 percent in the morning trade on January 23 after the company reported profit growth of 15.15 percent year-on-year to Rs 2,352 crore in the quarter ended December 2019, driven by lower tax cost and operating income.
  • Alembic Pharmaceuticals Limited (Alembic) today announced it has received final approval from the US Food & Drug Administration (USFDA) for its Abbreviated New Drug Application (ANDA) Bimatoprost Ophthalmic Solution, 0.03%.
  • Economic growth has been in a free-fall and IRA believes the upcoming budget will be a measure of government’s intent to get the economic momentum back on track. It is generally expected that the government would use the opportunity to announce policies that support growth revival.
  • Committee of directors of the company approved the allotment of 10,000 rated, listed, secured, redeemable, nonconvertible debentures bearing a face value of Rs 10,00,000 each, at par aggregating to Rs 1000,00,00,000.
  • Indian indices ended higher on January 23 with Sensex broke the three day losing streak, while Nifty also snapped four day losing streak and finished above 12,150 level comfortably.

Closing Comments:

At closing, the Sensex was up 271 points at 41386, while Nifty was up 73 points at 12180. About 1428 shares have advanced, 1064 shares declined, and 146 shares are unchanged. Yes Bank, IOC, L&T, GAIL and BPCL were among major gainers on the Nifty, while losers were Zee Entertainment, UPL, Power Grid, Cipla and Tech Mahindra.All the sectoral indices ended higher.

 

 

There are two most awaiting periodical events in the share market from the government side. One is the credit policy and another is the budget Its 1st February, this year when the budget is to be announced. So, let us have a look at the shares which would be impacted by the budget and what expectations they are having from the market.

So, look into this shares for the investment purpose.

  1. Titagarh Wagons
  2. Rites
  3. Brittania Industries
  4. Ramco Cements
  5. DLF

Above mentioned stocks to some or the other extents will be affected by the budget and could see good impact on the basis of announcement of the budget. We will try to discuss how these shares will be impacted by the announcement and what turnaround could be seen after it and how we see these shares. Let us discuss one by one.

  1. Titagarh Wagons

This is the stock of railway industry and was listed in NSE in 2008. The share is trading around the price of 58 Rs in the today’s session. There are expectations that met in. The stock could see positive returns because of the railway budget to be announced. The budget is expected to contain various measures which would impact the sector and thus the share.

  1. Rites

Rites is the company of Engineering and construction industry and is listed on exchange in 2018. The company is also expected to see a positive impact after the budget. The major reason behind this is the company is debt free. And the government will also take measures to boost the economy sector.

  1. Brittania Industries

Brittania Industries is the company in the Consumer goods industry and is in the FMCG sector. The company is facing the challenge due to the slowdown in the FMCG sector. But post budget the reversal is expected in the market.

  1. Ramco Cements

Ramco Cements is the company of Cement sector as the name suggests. The company is known for its innovative products and thus after the budget if measures taken to boost the constructions and infrastructure, the share could see good growth.

  1. DLF

DLF limited would also be impacted by the announcement of the budget. The government is to announce the measures to boost the reality sector. Thus the company is expected to give positive returns if invested.

 

 

This week we are writing for the traders who are new in the market. We started from the DEMAT account, told you about the investment prerequisites, market and in the series we will be telling you about what you should track as a beginner when you are going to start a trade. So, if you are new to stock market and you are willing to take the trading seriously than this article is for you and you should read it very carefully. In this, we will be telling you that what companies you should track and what to look for in the companies.

Stock selection is an important part of trading. As per me, it is first of the two requirements, the second one is timing when you pick the stock. Most of the points we will be discussing here are the points of stock selection. We will discuss later about the timing. Checking the fundamentals of the every stock you wish to buy is the most important thing. The very next thing you will be asking me that what to see in the fundamentals of the companies. For that part we will be writing a separate article.

Second thing what you need to remember when going to select a stock is that you should have understanding of the product and services of the company. As I usually say “Never invest in the business you can not understand.” Now, the next thing what should come to your mind is the durability of the product and services. For what duration the product and services will last. It means for what time they will continue to survive in the market. As you are investing your hard earned money in the same.

Cost durability of the company is also an important factor to consider when talking about the company. Competitive advantage of the company need to be tracked. There are other things also which an expert look into consideration but the most important things I have discussed in here. Some quick tips which I recommend here are:

  • Markets can act perversely in the short-term
  • Don’t try to rationalize market behavior
  • The market can stay irrational longer than you can stay solvent.
  • Don’t worry about what the markets are going to do, worry about what you are going to do in response to the markets.
  • Win or lose, everybody gets what they want from the market. Some people seem to like to lose, so they win by losing money.
  • Don’t focus on making money, focus on protecting what you have.

 

Sensex opened down 221 points at 41307 while the Nifty shed 58 points at 12166.20. Bharti Infratel and Zee Entertainment are the top gainers while Reliance Industries, Kotak Mahindra Bank and State Bank of India are the most active stocks. Except Nifty IT and Pharma all other sectoral indices were trading negative, Nifty Media gained the most 0.52%.

Global Market:

Among the global market, American market NASDAQ was trading 31.81 points up, and Among the European Market CAC, DAX and FTSE all were trading down with highest fall seen in the FTSE which was approximately 1.04% down. And in the Asian Markets SGX Nifty, Nikkai, Strait Times, Hang Sang were trading down and Kospi also trading down about 1%.Oil prices rose on Tuesday after Libya declared force majeure on two major oilfields following a military blockade and protests escalated in Iraq, raising supply concerns. Asian shares got off to a cautious start on Tuesday lacking any lead from Wall Street and after the IMF shaved its outlook for world growth this year, though it did offer a brighter view on China as per the report of Reuters.

Stir in the market:

  • ICICI Prudential Q3 net premium income went up 8.7 percent at Rs 8131 crore against Rs 7483 crore YoY. Net profit grew 1.9 percent at Rs 302.5 crore against Rs 297 crore YoY. Solvency ratio stood at 207.2 percent against 224.3 percent YoY.
  • Telcos mention AGR plea before CJI’s Court. CJI says matter to be heard next week by an appropriate Bench.
  • Shares of Bank of Maharashtra declined over 2 percent a day after the company reported a net profit of Rs 135 crore in the quarter ended December against a net loss of Rs 3764 crore in the year-ago period. On a quarter-on-quarter basis, the lender had reported a net profit of Rs 115 crore. Net interest income (NII) rose 36 percent to Rs 1186 crore. Net interest margins (NIM) stood at 2.86 percent compared to 2.41 percent in the year-ago period.
  • Shares of Federal Bank climbed almost 3 percent a day after the company posted a 32.1 percent increase in net profit at Rs 440.64 crore for December quarter 2019-20. Total income also improved to Rs 3738.22 crore during the third quarter as against Rs 3299.96 crore in the year-ago period, Federal Bank said in a regulatory filing.

Closing Comments:

Market closed in negative, Sensex ended down 205 points at 41323, and the Nifty shed 54 points at 12169. Bharti Infratel, Zee Entertainment and BPCL are the top gainers while Tata Steel, Mahindra & Mahindra and Tata Motors dragged the most. Among the sectors, metals and auto shed over a percent each while Bharti Airtel and Reliance Industries were the most active stocks. About 1082 shares have advanced, 1364 shares declined, and 168 shares are unchanged.

 

Choosing a right company for trading in the stock market is the biggest challenge before the investor, especially when you are a beginner. Today we will be trying to solve this puzzle for you and we will be telling the secrets behind the selection of the stocks. Let us discuss it one by one.

Do your research

If you are willing to start a trade, you need to pick the stock. In order to pick the stock you have to do your research on the stock. Your research will be helping you to select the stocks in the proper way.

Set goals

Setting goals is not only important in one’s life but also in every step of the life. The same is with the investments. You need to decide first that with the particular investment how much money you want to invest.

Know market requirement

You should be aware of the requirement of the market as well. What we mean to say here is not only the stock selection but the market requirement should be also taken into consideration when you are going to select a stock.

Choose strong companies

It is not wise to bet on the lame horse for the race. In the similar way when you are going to invest in the stock you must be aware of the category which the stock belongs to. Choose strong Companies.

Always deal with registered brokers

When it comes to selection of a trading member, you must be careful while making the selection of the companies. Our advise is that always deal with registered brokers.

Know all risk levels

When it comes to starting the trading, you must be aware of the all the associated risks at all the levels. What we mean by risk at all level is that you should take care of the risks about your investment, about the market and about the company.

Using some share trading systems

You must be aware of the trading systems provided by the brokers, various types of the orders that the broker allows and the associated bids with the software.

Improve your emotional quotient

You must try to improve your emotional quotient. Because many times when you will be dealing with the software you will be seeing the fluctuation in the price which will be providing you emotional turnarounds. You should know how to deal with the same.

We will be continuing with this in the upcoming blogs.

Today the market opened in a positive note. Benchmark indices open at record high level. The Sensex is trading around 121.77 points up and Nifty opened higher at 12375.80. Reliance Industries company reported highest ever net profit  in Q3FY20, Its net profit jumped 13.5% YoY basis. But the shares opened down due to some profit booking could have been seen in the share. The share fell down continuously after the opening, till 9:38 pm the share was trading around 1572.25. Among the indices, Auto, FMCG, Metal, Pharma, PSU Bank were trading positive and all other sectoral indices were trading negative. NHPC share gained approximately 16 % throughout the day, L&T housing finance was trading 5% down around 9:50. While Indian Rupee opened marginally lower at 71.10 per dollar against 71.08 per dollar previous close.

Global Markets:

Coming to the global markets, Around 1’ O clock US Market NASDAQ trading 31 points up. And all three major indices of European Market CAC, DAX and FTSE were trading positively and DAX gaining 96.70 points up. Among Asian markets, SGX Nifty was trading negative, NIKKAI trading positive, STRAITS TIMES, HANG SENG trading negative. SHANGHAI COMPOSITE gained the most 0.66% till the afternoon.

Stir in the market:

  • In last three months the FMCG stocks company Polycab India rallied 58% and its net profit doubled to 194 Cr in September quarter Q2FY20 on back of strong revenue growth. It had logged the profit of 90 crore before the year.
  • The government is likely to abolish the dividend distribution tax in the upcoming budget. And is planning to tax the dividends in the hands of the investor.
  • Shares of Prestige Estate were up 10% in the todays market. The stock of bangluru based real estate developer was trading at all time high level.

Closing Comments:

Sensex was 416.46 points down at 41528, and Nifty was 127 points down at 12224. Among the indices except FMCG and Reality all other segments ended in red. Bank Nifty and the financial services stocks were down. Reliance and Bharti Airtel were the most active shares on the basis of volume and  Idea and yes bank were the most active shares on the basis of quantity.